Rupee nears 69/dollar level, markets on edge

Continuing its free fall on Wednesday, the rupee fell to a lifetime low of 68.85 against the dollar before closing at 68.80, registering its biggest single-day loss of 256 paise.

A stockbroker reacts as he monitors share prices during intraday trade at a brokerage firm in Mumbai. (AFP Photo/File photo)

Fears of a possible US-led military strike against Syria increasing crude oil prices, which touched a two-year peak of $117/barrel, raised the spectre of India’s current account deficit going out of control and spooked investors. Three day tally

In tandem with the rupee slide, the Indian stock markets also tanked in the morning, but recovered later.

The BSE Sensex crashed 520 points or almost 3% in the morning to 17,448.71 before massive buying by LIC and some domestic mutual funds lifted the Sensex to 17,996.15, a 28 point gain over its previous close.

Many investors moved to a safe haven investment like gold, which scaled a new peak of Rs. 34,500, up Rs. 2,500.

In three trading days this week, the rupee has lost 560 paise, or 8.9%, against the dollar. So far in August, it has tanked 840 paise, or about 14%, and in the current financial year about 25%.